From Startup To Selling For Half A Billion

Ben Kartzman
COO Of Mediaocean, Exited founder of SpongeCell
1hr 36min
December 14, 2023
About the Show

"We came up with this mantra; instead of trying to raise capital, we're going to try to raise revenue. It was this novel concept of actually trying to make more money than we spent."

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Ben Kartzman is the COO of Mediaocean, a multi-billion dollar ad tech company. He was previously the CEO and co-founder of SpongeCell, an ad tech startup that was acquired by FlashTalking. Kartzman has successfully navigated multiple acquisitions and integrations throughout his career in ad tech.

In this interview, Kartzman outlines his journey from college soccer player to serial entrepreneur. He shares stories and lessons learned from the rise and fall of several startups, including gritting through the dot-com crash and having to lay off employees during the 2008 financial crisis. Kartzman stresses the importance of autonomy, transparency, building the right team, and learning to balance optimism with realism as an entrepreneur. He also provides an inside look at acquisition negotiations and building rapport with potential buyers. For entrepreneurs and aspiring founders, this interview offers hard-won wisdom on persevering through difficult times, pivoting business models, and creating successful exits. Kartzman shows that with resilience, adaptability, and the right teammates, one can navigate the turbulent waters of the startup world to build substantial companies.

Episode Links

Mediaocean: https://www.mediaocean.com/

FlashTalking: https://www.flashtalking.com/

SpongeCell: https://www.spongecell.com/

Toga Builders: http://www.togabuilders.com/

Carnegie Mellon University: https://www.cmu.edu/

Seabridge: https://www.seabridgegold.com/

BridgeLine: https://www.bridgeline.com/

Accenture: https://www.accenture.com/

Union Square Ventures: https://www.usv.com/

Dissidia/Guidestar: https://www.guidestar.org/

Key Moments

Ben is an incredibly accomplished entrepreneur and business leader who has a remarkable story of grit, perseverance, and learning through multiple journeys of building, scaling, exiting, and acquiring companies over the past 20 years. Ben took his first startup, Spongecell, through the highs and lows of the 2008 financial crisis, choosing revenue over fundraising at a pivotal point. After getting acquired by FlashTalking in 2018, Ben helped scale the combined organization to 9 figures in revenue before it was acquired again by Mediaocean in a billion dollar deal.

Throughout his interview, Ben dropped many nuggets of entrepreneurial wisdom that could benefit any founder or business builder. Here are 5 of his most important pieces of advice for aspiring entrepreneurs looking to emulate his success.

Lessons from Surviving a Dot Com Collapse

Early in his career, Ben joined a hot startup called SeaBridge during the frothy days of the dot com bubble. Within a year, he witnessed the company grow from 500 to 1500 people while becoming a public company. However, the rapid expansion was short-lived - with the market collapse, layoffs claimed half the staff within 9 months. Ben persisted as the company crashed from a peak of 1600 employees down to just 40 remaining when he finally left.

This trial by fire taught Ben invaluable lessons about forces beyond one's control, while also revealing his own grit and determination. The experience humbled him but also showed the resolve needed to overcome outside turmoil.

Ben reflects that the sooner you make difficult decisions like layoffs, the better off the company's future may be. However, he also learned these lessons must be experienced firsthand, not just taken as advice. Weathering the storm gave him an early glimpse into the ups and downs all entrepreneurs face.

Don't Give Yourself Space to Fail

Ben credits much of his unrelenting drive and work ethic to a formative experience with his father. After losing his job in the dot com collapse of the early 2000s, Ben asked his father if he could move back home. His father's response shocked him - "You can't move home. Figure it out." As Ben reflects, "It was the kick in the ass I needed." Instead of having a safety net to fall back on, he was forced to scrap and find any work possible, leading him to eventually build a successful career in startups.

This experience taught Ben an important lesson that he still carries today: "Don't give yourself space to fail." By removing excuses and safety nets, you're forced to summon the drive and creativity to make things work. The next time you're feeling deterred or doubtful, remember Ben's story and don't allow yourself space to fail.

Choosing Financial Independence over Investors

After Spongecell struggled through the 2008 financial crisis, Ben had a pivotal conversation with his co-founders. With dwindling cash reserves, most entrepreneurs would seek new fundraising to stay afloat. However, Ben and his partners decided they would never fundraise again - they would only "raise revenue."

This mantra of sustainability through a profitable business model guided them for years afterwards. Even when they eventually did take institutional investment, Spongecell reinvested most of it into growth rather than spending. Ben reflects that maintaining cost discipline, even when cash is available, prevents much worse dilution down the road if the market turns.

Every entrepreneur faces forks in the road where quick capital from investors provides relief but erodes control. Ben's lesson is that if you can find a path to profitability and sustainability, it can pay dividends for both independence and valuation later on.

Selling Your Company Might Not Be The Right move

Ben had opportunities to sell Spongecell earlier on, including serious acquisition conversations with Yahoo in 2010-2011. However, Ben chose to stay the course and keep building. He recalls the leadership team concluding that they could still do more and realize their vision if they stayed independent.

Saying no to a personal payday is excruciating for most entrepreneurs. However, Ben focused on the purpose and potential they were creating. While wealth is nice, it wasn't the end goal - building something great was. This choice paved the way for over 5 more years of growth and learning before eventually selling to FlashTalking for a much larger amount. 

Remember that selling too early can cost you far more in terms of purpose, potential, and financial outcomes than you imagine. If you have the talent and opportunity to build something truly unique, don't cash out until you've given it your all.

Staying Innovative After Acquisition

It's rare for startup founders to stay engaged through multiple acquisitions like Ben has. Most either take the money and move on, or the acquiring company sidelines them over time. So how has Ben stayed core to the organization after sales to FlashTalking and now Mediaocean?

He credits resilience directly to his drive to keep innovating. Ben focuses on improving the product, creating new solutions, and delighting customers. He also obsesses over hiring and developing talented, malleable teams oriented around problem solving - seeking out “athletes” from all backgrounds.

By maintaining the critical elements of entrepreneurial culture, through autonomy, transparency, trust and scrappiness, Ben has spearheaded successful integrations and scale. Mediaocean's social advertising and personalization capabilities today build directly on Spongecell’s early vision.

If you want to hear Ben recount his full origin story and more advice, be sure to check out our full Forward Obsessed podcast interview. Ben’s journey shows that with determination, resilience and smart decisions, one can turn startup hustles into a thriving multi-billion dollar enterprise. By always raising revenue over capital, choosing potential over payouts, and innovating within constraints, greatness often follows.

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